Having a MAP policy doesn’t automatically mean your SKUs and prices are protected. If you don’t enforce your MAP policy, some sellers won’t care about violating it—and then even your best retail partners may follow suit to stay competitive.
If your sellers aren’t respecting your MAP policy, here’s what you need to do.
Assess the damage
When sellers are violating your MAP policy, the first thing you need to figure out is how many individual violations you’re dealing with and what the impact of those violations are. Unfortunately, MAP violations are inevitable. Before you start dishing out penalties, you need to fully understand the scope of the problem and the risk of doing nothing.
Focus on the most important SKUs
Every MAP violation does damage. But they aren’t all worth pursuing. In many cases, you’ll have more violations than you have the capacity to handle. That means you need to evaluate which SKUs are most important to your brand, and which violations are doing the most damage.
We recommend focusing on the top 10-20 percent of your SKUs. This ensures that enforcing your MAP policy is always worth your time. Additionally, the impact of enforcing the pricing for your most prominent products can trickle down to your other SKUs as sellers start to see that you take your brand seriously and that violating your policy comes with serious consequences.
Identify the violators
In order to stop violations, you have to address the violator. But sometimes you don’t know who they are, thus you may need to do a little investigating. You can’t just send emails into the abyss of the Internet and trust that the violations are going to stop. You need to track down the contact information for each seller who violates your policy.
If you already have contact information for a seller who violates your policy, it’s time to move to the enforcement phase.
Even good sellers often wind up violating your policy if everyone else is doing it, because they can’t compete with the lower prices. This triggers what we call “race-to-the-bottom” pricing and price erosion. Work to identify the sellers who initially trigger the race to the bottom as stopping them can often solve the problem because your other sellers will default to respecting your policy.
Establish processes to fix the problem
You can’t stop MAP policy violations if you don’t have a process in place for doing so. Your MAP policy needs to have clearly outlined consequences and a well-defined process for managing violations.
Brands need the infrastructure in place to monitor your pricing and enforce your policies. You need tools and technology that can catch violations as they happen. (Some MAP-related software only pulls pricing data on a set schedule, which allows sellers to violate your policy in between the gaps.) And you need a specific person (or team of people) who are actively responsible for enforcing your MAP policy. This isn’t a job for an intern or an entry-level employee. It needs to be someone who cares about your brand and understands the importance of defending your price.
It also helps to have a process for vetting your retail partners in the first place. A reseller agreement can help you choose sellers who are most likely to uphold your brand.
As you enforce your MAP policy, third party sellers will take notice that you’re protecting your brand, and in many cases, they’ll move on to other undefended brands.